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Google Twists Arms at Facebook and Yelp. Is Your Company Next?

When Google (GOOG) changed its algorithms to get sites with higher quality content more prominently into search results, many sites took a hit in their search rankings.

Holding true to the rule of unintended consequences, some of the sites, like Cult of Mac, that felt the wallop had good content. So Google is trying to address the problem with additional algorithm changes. Apparently at least some of the affected sites have already seen improvement. It might seem like Google holding to its philosophy, most often cited as don't be evil: "You can make money without doing evil." But the beaming face distracts from how hard ball Google's tactics can be, as some recent examples show.

In an interview with the London Telegraph, consumer review site Yelp's CEO, Jeremy Stoppleman, said that Google has for years been using Yelp customer reviews on Google Places:

Google's position is that we can take ourselves out of its search index if we don't want them to use our reviews on Places--. But that is not an option for us, and other sites like us â€" such as TripAdvisor â€" as we get a large volume of our traffic via Google search...We just don't get any value out of our reviews appearing on Google places and haven't been given an option other than to remove ourselves from search, how to improve this situation.
Here's the official Google response, as reported by the Telegraph:
We can't comment on conversations with partners, but as we've said before, our goal with local search is to help Google users find the local information they're looking for online. Each day we send millions of customer referrals to local businesses and third party websites, such as review sites, through local search. The overwhelming feedback we get from users, business owners and website owners is that they value the answers and traffic they receive from local search.
That translates into, "We're going to do what we want because it makes sense for our business." In short, assuming that Stoppleman has been accurate in his portrayal, Yelp can either give up the heart of its content for Google's convenience, or it can do without any search listings. The problem for Yelp is that it competes with Google Places.

Not that Yelp is necessarily a innocent lamb in the woods. The company has faced lawsuits from business alleging that Yelp asked for payments to remove bad customer reviews. But Google wanted the content enough to reportedly offer $500 million to buy Yelp. The talks fell through. However, there's a big difference between running a headline and lead sentence from an article on Google News and pulling entire reviews into your own local shopping service.

The other recent example is that Google decided not to sign up as a Facebook ad provider. You could imagine why, especially as Facebook advertising providers collecting any personal data of users, even if they consent. The terms include prohibition against even anonymous or aggregate data.

However, what it also effectively means is that Facebook apps can no longer make money using Google AdWords, a "significant source of revenue" for many developers, according to the All Facebook blog:

Ultimately the alternatives may not be horrendous, but none have the brand cachet that Google does. While it could theoretically be added to the list in the future, developers now have to choose between using preferred ad networks or risk being blocked from the platform.
So far, no word about app developers who have walked away from the platform, although a number are clearly concerned about the development.

Not that the developers think of Facebook as a victim. And it's not to say that Google is unreasonably refusing to sign the Facebook advertising terms. But it is a power play that shows how Google is entirely comfortable using its corporate weight and taking all or nothing stands.

Maybe the mantra should be: "You can make money without getting caught doing evil."

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Image: Flickr user Paolo Camera, CC 2.0.
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